The removal of costly appraisal requirements on tens of thousands of smaller commercial properties could help community banks better compete for loans they say they have been losing to nonbank lenders.
Plans for a West Palm Beach, Fla. development with micro-condominiums, affordable apartments, offices, a grocery and a park, have collapsed over city commissioner concerns the developer couldn't make it happen.
TriStar Bank in Tennessee says a shortage of appraisers is slowing down its commercial real estate lending and raising the cost of appraisals. The claim has outraged appraisers, who argue that the bank is simply trying to avoid paying their fees.
Nonbanks are originating more commercial mortgages on fixer-uppers in response to a sharp drop in the cost of funding in the securitization market. These deals are said to be "vastly different" than other CRE instruments that sustained big losses in the crisis — so far.